A blog dedicated to commentary, technical analysis, and the general machinations of the global gold and silver bullion markets with additional commentary on the global economy and related commodity markets.

Tuesday, June 12, 2007

The Damage Has Been Done

Excuse me please if I remain bullish in the face of this onslaught. I've survived worse, and I'll survive this as well. Hopefully those reading this will too. Through March, April, and May the Gold Market absorbed 170+ tonnes of central bank gold selling. All of it bought at prices higher than we are staring at today. Investor demand grows by the day, as supply shrinks. In retrospect, today's "drama" feels like a walk in the park compared to the nightmare we all lived thru (and survived) last Spring as Gold collapsed between May 11 and June 13, 2006.

Oh my, look at the calender, today is June 13th, 2007. What a bizarre coincidence.

Yes, once again the picture isn't pretty. The bulls are hanging their heads, sentiment at a low. What a pity party we are reluctant to attend.

Baby steps. Gold and Silver will repair their despair. It will take time, and only add to our frustration. Six months from now we can all look back and laugh at our sorry asses as we stomp on dem Rat Bastids and squeeze da piss out of them.

We must walk before we can run. It remains to be seen if Friday's low was the bottom. We should know by the end of this week. On the one hour charts Gold and Silver both broke their free fall from Friday on Monday. Tuesday they revisited Friday's lows in what so far appears to be a retest of those lows. To confirm the Friday low and Tuesday's retest, Gold must clear 655 and Silver must clear 13.26 on a closing basis.

The 10 year T-bond has been in a reverse parabolic dump for several days now. That's a wordy way of saying the 10 year T-bond has fallen off a cliff. However, with key support within spitting distance, and the 1o year now at parity with the Fed Funds rate, it would not surprise me to see a bounce in the 10 year note here. Who will be buying those notes? Ben Bernake and friends. He has admitted to such a reaction should the world begin to dump our bonds. Ben and Company cannot afford to let this rout in the bond market get out of hand and take down the stock market and the economy. They'll print some more money, buy some treasury bills, and hope for the best. Meanwhile, the Precious Metals will get a choppy reprieve until the sh*t (the Dollar) hits the fan this fall and the Stock market revisits 1987.

All Aboard!

Gold and Silver Support continue to be at their respective (rising) 50 WEEK moving averages: